{"id":17645,"date":"2022-05-25T16:00:27","date_gmt":"2022-05-25T10:30:27","guid":{"rendered":"https:\/\/mcq-questions.com\/?p=17645"},"modified":"2022-05-17T11:02:29","modified_gmt":"2022-05-17T05:32:29","slug":"mcq-questions-for-class-12-economics-chapter-6-part-a","status":"publish","type":"post","link":"https:\/\/mcq-questions.com\/mcq-questions-for-class-12-economics-chapter-6-part-a\/","title":{"rendered":"MCQ Questions for Class 12 Economics Chapter 6 Open Economy Macroeconomics with Answers"},"content":{"rendered":"

Students who are searching for NCERT MCQ Questions for Class 12 Economics Chapter 6 Open Economy Macroeconomics with Answers Pdf free download are compiled here to get good practice on all fundamentals. Know your preparation level on MCQ Questions for Class 12 Economics with Answers<\/a>. You can also verify your answers from our provided Open Economy Macroeconomics Class 12 MCQs Questions with Answers. So, ace up your preparation with MCQ on Open Economy Macroeconomics Class 12 Objective Questions.<\/p>\n

Open Economy Macroeconomics Class 12 MCQs Questions with Answers<\/h2>\n

Choose the correct alternative.<\/span><\/p>\n

Question 1.
\nOther things remaining unchanged, when in a country the price of foreign currency rises, national income is:
\n(a) Likely to rise
\n(b) Likely to fall
\n(c) Likely to rise and fall both
\n(d) Not affected<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (a) Likely to rise<\/p>\n<\/details>\n

\n

Question 2.
\nForeign exchange transactions dependent on other foreign exchange transactions are called:
\n(a) Current account transactions
\n(b) Capital account transactions
\n(c) Autonomous transactions
\n(d) Accommodating transactions<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (d) Accommodating transactions<\/p>\n<\/details>\n

\n

Question 3.
\nOther things remaining the same, when in a country the market price of foreign currency falls, national income is likely:
\n(a) to rise
\n(b) to fall
\n(c) to rise or to fall
\n(d) to remain unaffected<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (b) to fall<\/p>\n<\/details>\n

\n

Question 4.
\nForeign exchange transactions which are independent of other transactions in the Balance of Payments Account are called:
\n(a) Current transactions
\n(b) Capital transactions
\n(c) Autonomous transactions
\n(d) Accommodating transactions<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (c) Autonomous transactions<\/p>\n<\/details>\n

\n

Question 5.
\nWhat is the cause of the devaluation of any country\u2019s currency?
\n(a) Increase in the domestic inflation rate
\n(b) Domestic real interest rates are less than foreign interest rates
\n(c) Much increase in the income
\n(d) All of these<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (d) All of these<\/p>\n<\/details>\n

\n

Question 6.
\nThe operation of daily nature in the foreign exchange market is known as
\n(a) Spot market
\n(b) Forward market
\n(c) Domestic market
\n(d) International market<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (a) Spot market<\/p>\n<\/details>\n

\n

Question 7.
\nThe operation of future delivery in the foreign exchange market is known as
\n(a) Spot market
\n(b) Current market
\n(c) Forward market
\n(d) Domestic market<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (c) Forward market<\/p>\n<\/details>\n

\n

Question 8.
\nTrade of visible items between the countries is known as
\n(a) Balance of Payment
\n(b) Balance of Trade
\n(c) Deficit Balance
\n(d) All of these<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (b) Balance of Trade<\/p>\n<\/details>\n

\n

Question 9.
\nWhen the import and export of visible items are equal, the situation is known as
\n(a) Balance of Trade
\n(b) Balance of Payment
\n(c) Trade Surplus
\n(d) Trade Deficit<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (a) Balance of Trade<\/p>\n<\/details>\n

\n

Question 10.
\nWhen there is a favourable balance of trade?
\n(a) X > M
\n(b) X = M
\n(c) X < M
\n(d) None of these<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (a) X > M<\/p>\n<\/details>\n

\n

Fill in the blanks with the correct word.<\/span><\/p>\n

Question 11.
\n_______ rate of exchange refers to the rate of exchange as determined by the government.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: Fixed<\/p>\n<\/details>\n

\n

Question 12.
\n______ market deals with such sale and purchase of foreign exchange which are contracted today but are implemented sometimes in the future.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: Forward<\/p>\n<\/details>\n

\n

Question 13.
\n______ rate of exchange is also called the free rate of exchange.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: Flexible<\/p>\n<\/details>\n

\n

Question 14.
\nThe balance of ______ is the difference between visible exports and visible imports.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: trade<\/p>\n<\/details>\n

\n

Question 15.
\nBalance of Payment has ______ accounts.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: three<\/p>\n<\/details>\n

\n

Question 16.
\nBalance of Payment is always ________<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: positive<\/p>\n<\/details>\n

\n

Question 17.
\nIf exports exceed imports, then BoP is ________<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: favourable<\/p>\n<\/details>\n

\n

Question 18.
\nWhen exports are equal to imports, then it is the situation of _________<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: equilibrium<\/p>\n<\/details>\n

\n

Question 19.
\nBalance of trade includes only ________ items.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: visible<\/p>\n<\/details>\n

\n

State whether the following statements are true or false. Give reasons.<\/span><\/p>\n

Question 20.
\nThe difference between the value of exports and imports of goods and services is called a trade balance.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: False
\nBalance of trade refers to the relationship between the value of imports and exports of the goods of a country. It does not include invisible items such as services.<\/p>\n<\/details>\n

\n

Question 21.
\n\u2018Managed Floating Exchange Rate is decided by market forces but remains within a specific range as decided by the central bank.\u2019<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: True
\nIn this system, the central bank intervenes to minimize fluctuation in the exchange rate.<\/p>\n<\/details>\n

\n

Question 22.
\nExcess of foreign exchange receipts over foreign exchange payments on account of accommodating transactions equals deficit in the Balance of Payments.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: False
\nExcess of foreign exchange receipts over foreign exchange payments on account of autonomous transactions equals deficit in the Balance of Payments.<\/p>\n<\/details>\n

\n

Question 23.
\nExport and import of machines are recorded in the capital account of the Balance of Payments account.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: False
\nExport and import of machines are not recorded in capital account as capital account transactions do not involve the movement of goods. Export and import of machines is a part of the Current Account.<\/p>\n<\/details>\n

\n

Question 24.
\nThe current account of Balance of Payments accounts records only exports and imports of goods and services.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: False
\nThe current account of the Balance of Payments account also records unilateral transfers along with exports and imports of goods and services.<\/p>\n<\/details>\n

\n

Question 25.
\nForeign investments are recorded in the capital account of Balance of Payments.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: True
\nForeign investments are recorded in the capital account of Balance of Payments as it involves a change in ownership of assets.<\/p>\n<\/details>\n

\n

Question 26.
\nBanking and insurance are examples of visible items.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: False
\nThese are services and hence, are part of invisible items.<\/p>\n<\/details>\n

\n

Match the alternatives given in Column II with respective terms in Column I.<\/span><\/p>\n

Question 27.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n
Column I<\/td>\nColumn II<\/td>\n<\/tr>\n
(i) Items of Current Account<\/td>\n(a) Includes only visible items<\/td>\n<\/tr>\n
(ii) Items of Capital Account<\/td>\n(b) Above the line items<\/td>\n<\/tr>\n
(iii) Balance of Trade<\/td>\n(c) Unilateral transfers<\/td>\n<\/tr>\n
(iv) Current Account Balance<\/td>\n(d) Exports will increase<\/td>\n<\/tr>\n
(v) Autonomous Transactions<\/td>\n(e) Imports will increase<\/td>\n<\/tr>\n
(vi) Accommodating Transactions<\/td>\n(f) Portfolio Investment<\/td>\n<\/tr>\n
(vii) Effect of appreciation of the domestic currency<\/td>\n(g) Below the line items<\/td>\n<\/tr>\n
(viii) Effect of depreciation of the domestic currency<\/td>\n(h) Includes visible and invisible items<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\nAnswer<\/span><\/summary>\n

Answer:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n
Column I<\/td>\nColumn II<\/td>\n<\/tr>\n
(i) Items of Current Account<\/td>\n(c) Unilateral transfers<\/td>\n<\/tr>\n
(ii) Items of Capital Account<\/td>\n(f) Portfolio Investment<\/td>\n<\/tr>\n
(iii) Balance of Trade<\/td>\n(a) Includes only visible items<\/td>\n<\/tr>\n
(iv) Current Account Balance<\/td>\n(h) Includes visible and invisible items<\/td>\n<\/tr>\n
(v) Autonomous Transactions<\/td>\n(b) Above the line items<\/td>\n<\/tr>\n
(vi) Accommodating Transactions<\/td>\n(g) Below the line items<\/td>\n<\/tr>\n
(vii) Effect of appreciation of the domestic currency<\/td>\n(e) Imports will increase<\/td>\n<\/tr>\n
(viii) Effect of depreciation of the domestic currency<\/td>\n(d) Exports will increase<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/details>\n
\n

Use the above-provided NCERT MCQ Questions for Class 12 Economics Chapter 6 Open Economy Macroeconomics with Answers Pdf free download and get a good grip on the fundamentals. Need any support from our end during the preparation of CBSE Class 12 Economics Open Economy Macroeconomics MCQs Multiple Choice Questions with Answers then leave your comments below. We’ll revert back to you soon.<\/p>\n","protected":false},"excerpt":{"rendered":"

Students who are searching for NCERT MCQ Questions for Class 12 Economics Chapter 6 Open Economy Macroeconomics with Answers Pdf free download are compiled here to get good practice on all fundamentals. Know your preparation level on MCQ Questions for Class 12 Economics with Answers. You can also verify your answers from our provided Open …<\/p>\n

MCQ Questions for Class 12 Economics Chapter 6 Open Economy Macroeconomics with Answers<\/span> Read More »<\/a><\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"default","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","spay_email":""},"categories":[35],"tags":[],"yoast_head":"\nMCQ Questions for Class 12 Economics Chapter 6 Open Economy Macroeconomics with Answers - MCQ Questions<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/mcq-questions.com\/mcq-questions-for-class-12-economics-chapter-6-part-a\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"MCQ Questions for Class 12 Economics Chapter 6 Open Economy Macroeconomics with Answers - MCQ Questions\" \/>\n<meta property=\"og:description\" content=\"Students who are searching for NCERT MCQ Questions for Class 12 Economics Chapter 6 Open Economy Macroeconomics with Answers Pdf free download are compiled here to get good practice on all fundamentals. 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